The head of Germany’s financial regulator BaFin is being replaced after the regulator charged one of its own employees with insider trading in connection with the failed mobile payment firm Wirecard AG.
The German finance ministry announced that it’s replacing the president of the Federal Financial Supervisory Authority (BaFin), Felix Hufeld, in the wake of the Wirecard accounting scandal.
In a release, the government said the scandal has “revealed that the German financial supervisory authority needs a reorganization in order to be able to fulfil its supervisory function more effectively.”
The results of an investigation into the regulator’s handling of the Wirecard affair will be published in the coming week, the Ministry of Finance said. Following a meeting on Friday with Hufeld, they “came to the mutual decision” that the top personnel at the regulator should be changed, the ministry said.
The move comes in the wake of the regulator announcing that an employee who worked in its securities supervision division allegedly sold structured products that included Wirecard shares on June 17, 2020, the day before the company publicly revealed it was missing €1.9 billion.
BaFin said it uncovered a suspected case of insider trading in a special internal investigation. As a result, it filed a criminal complaint with prosecutors in Stuttgart against an unnamed employee.
It also noted that the employee was immediately suspended and that it initiated disciplinary proceedings against them.
Last October, BaFin introduced stricter compliance rules for personal trading by its staff, including prohibition on speculative trading.